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2004 (8) TMI 92 - HC - Income TaxCapital gain – transfer of assets – dissolution of firm - Revenue submitted that as one of the partners had paid a sum of Rs. 5 lakhs to the other partner, it was a case of transfer of asset and therefore assessable to the capital gain tax. From the finding recorded by the Tribunal it is seen that on account of mutual distrust between the partners a situation arose when the business of the firm could not be carried on smoothly and, therefore, both the partners had decided to dissolve the firm. Offer was given on dissolution by the assessee to take over the assets of the firm from the other partner for Rs. 2,50,000. However, the other partner offered a sum of Rs. 5 lakhs with certain conditions which was accepted by the assessee - Thus it is a case of dissolution of partnership firm and it did not result in any transfer of the assets - Tribunal was justified in holding that the transaction was not a transfer and no capital gains accrued
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